SingPost Profits Slide on US E-commerce Struggle

Singapore Post (SingPost) has recorded an 86% dip in net profit for its fiscal year, ended 31 March, which it attributes mainly to difficulties it is facing in the US e-commerce market.

The postal services operator said e-commerce revenue dropped 0.3% for the year where it continued to be challenged by ‘intensifying’ competition and cost pressures in the US. There also had been an increase in customer bankruptcies in the US, where SingPost saw its loss on operating activities climb to SGD$51.9m (£29.19m).

The group is currently looking to divest its e-commerce business in the market, where its businesses reported ‘impairment charges’ of SGD$98.7m (£55.51m).

SingPost Group CEO Paul Coutts said: “Despite our best efforts in turning the US business around, we faced increasingly intense challenges that impacted our performance. As a result, we made the difficult decision to commence the sale process for our US e-commerce business.”

The company’s revenue for the year increased 2.9% to SGD$1.56bn (£877.32m) and its net profit would have climbed 15.8% if its US businesses were excluded, though it still would have dropped 5.8% from the previous year.

Following a review of its US businesses, SingPost said these would be put up for sale and it would be exiting the US market. It noted that its strengths and strategic competitive advantages were in Southeast Asia and Asia-Pacific, where there were more growth opportunities and better returns on investments.

Coutts said SingPost still was “committed” to its e-commerce business, which it said was a key part of its strategy to future financial growth.

“The group’s competitive advantage lies in Asia-Pacific where we are seeing the strongest growth in volumes and yields and we will continue to refine our businesses to leverage the growth,” he said. “In the immediate term, we continue to focus on improving our operations in Singapore to better serve the needs of customers in our home market.”

SingPost in April was fined SGD$300,000 (£169,673) by the Singapore industry regulator for failing to meet postal quality of service standards for delivery of local and international letters last year. It was found to have 20 incidents of non-compliance in 2018, compared to nine in 2017, as well as repeated delivery failures including lost letters.

Flipkart Expands Online Grocery Service to Mumbai

The Indian e-commerce giant has launched an online grocery service in Mumbai, promising to offer quality products and cost savings.

Available in Mumbai, Flipkart Supermart delivers to 91 PIN codes across the Indian city or about 75% of the total area codes, including the western and central suburbs.

The online grocery service already operates in Bengaluru, Chennai, Hyderabad, and Delhi.

Flipkart said the online supermart’s current inventory ranged from FMCG to dairy products as well as its own label that offered staples. It added that it would be partnering farmers, producer organisations, and local micro, small and midsize enterprises (MSMEs).

A separate supply chain for groceries had been established in Mumbai that comprised fulfilment centres and a last-mile delivery network, according to the Indian e-commerce operator.

It noted that grocery was India’s largest retail category, but also the most under-penetrated major categories in the country’s e-commerce market. Citing industry estimates, Flipkart said the Indian grocery industry was worth USD$400bn (£307.83bn) and online accounted for just 0.5% of this figure.

Flipkart’s head of grocery Manish Kumar said: “With Flipkart Supermart, we see tremendous potential for us to leverage our expertise in logistics and technology to give our customers the maximum savings, convenience, quality, and breadth of selection. Our grocery business has grown phenomenally over the last year, making this the right time for us to bring our seamless shopping experience to Mumbaikars.”

Lazada, Shopee and Tokopedia Top SEA Shopping Apps

Lazada has chalked up the highest average monthly active users (MAU) amongst e-commerce shopping apps across four Southeast Asia markets, while Shopee leads in Vietnam, and Tokopedia rules in its domestic Indonesian market.

Shopee placed second in all the markets Lazada led in the first quarter of 2019, with the exception of Singapore, where it trailed in third behind Qoo10, according to stats released by iPrice Group in partnership with App Annie. The data identified the top e-commerce mobile shopping apps across six key Southeast Asian markets: Singapore, Indonesia, Thailand, Vietnam, Malaysia, and the Philippines.

Lazada emerged with the highest average MAU in Singapore, Malaysia, Thailand, and the Philippines. It placed second in Vietnam and fourth in Indonesia, where Shopee ranked second behind Tokopedia.

iPrice noted that Lazada had invested efforts over the past year to engage tech-savvy consumers, introducing new features such as an in-app live-streaming function and Image Search feature.

It added that Shopee, too, had been focusing on delivering a ‘hyper-localised’ user experience, offering a different app for each country in which it operated. “This has been an effective strategy as Shopee remains as one of the youngest players amongst the top apps, quickly rising through the ranks since its founding in 2015,” iPrice said.

It added that while Tokopedia was available only in Indonesia, it was the third-most visited e-commerce platform in Southeast Asia last year, clocking an average 125 million visitors.

Amazon, which launched its Prime Now service in Singapore in 2017, ranked 9th in the island state in terms of average MAU, and at a higher fifth place in Thailand and seventh in Vietnam.

BOLT Inks Deal with Malaysia E-commerce Specialist

Under the agreement, Payfo would push BOLT content across its service channels and database of more than 26 million individuals. In addition, the BOLT Token would be rolled out as an incentive and reward system, enabling customers to accumulate and trade the tokens to access premium content, including entertainment and sports, as well as trade for mobile data plans offered by participating telco networks.

The tokens can be stored in the BOLT Wallet.

Brands and marketers can also tap the platform to target consumers, with the option to buy BOLT Tokens that can then be used as advertising credits for sponsoring content.

BOLT’s founder and CEO Jamal Hassim said: “Whilst BOLT already has a strong user base in Malaysia and the Asean region, the partnership with Payfo will significantly increase our reach and eventually their base of users for BOLT+, BOLT Wallet, and BOLT Token.”

Payfo CEO, Ezwan Annuar, added that the partnership would help improve customer loyalty and create more value from the richer engagement with users.

Alipay Connects to 400,000 Japan Merchants

Alibaba’s mobile payment platform has chalked up a merchant network of 300,000 in Japan, growing 500% from early 2018.

This meant that tourists from China would be able to pay for purchases at 300,000 merchants across Japan using their Alipay app.

The country was amongst the most popular holiday destinations for Chinese travellers, ranking fourth in terms of Alipay transaction volumes during the four-day Labour Day holiday earlier this month.

Japan also clocked one of the biggest increases in tourist spending, with average spending per consumer on Alipay growing 25% year-on-year, according to Alibaba’s Ant Financial, which pointed to convenience stores, airport shops, and department stores as the most popular merchants for Alipay shoppers in the country.

China is Japan’s largest tourism market last year, accounting for 27% of the 31 million tourists who visited the country.